*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
Recent studies from different insurers and brokers have revealed a positive trend. Employers, mainly those belonging to the Financial Services, Banking Industries, or the IT Sectors are giving their employees a chance to enhance the medical group cover albeit at a price. More and more employers these days go for the top-up policies on behalf of their workforce as part of this significant positive development.
In keeping with this slow yet steady increase in demand in these sectors, other services are expected to follow suit in the coming times. Another term for this is the voluntary top-ups. According to such schemes, employees can increase the policy covers through out-of-pocket premium payments. The commonest ones opted for in this regard at the medical insurance top-ups according to the study.
As per a survey by the Insurance Brokers from Marsh 25% of organizations, these days are offering these top-up plans as compared to just 17% in the last year. Such options are quite popular with employers looking for extended benefits to their employees while being concerned regarding the management of costs. As the premium rates related to medical cover constantly increase such topping up of policy covers have surely emerged as a viable solution.
According to various industry watchers, employer-sponsored health insurance costs are getting bigger by the day, forcing the industries to go for lower amounts of the sum insured. Both the employees and their families naturally have to endure the fallouts of such cost-cutting measures. Medical expenses increase by the day with employees demanding higher amounts of the sum insured. Naturally, a clamour for the alternatives is regularly gaining speed with HR managers searching for possible options.
In top-up of covers, employer works as the mere facilitator with premiums being paid by the employees. A typical top-up cover, which works after employer-sponsored base covers is between INR 2 Lakh and INR 3 Lakh. This amount depends upon the employee-employer agreement. Annual premiums vary between INR 3000-INR 6000 for families. Factors affecting the premium rates are the age of the employee, insurer’s scheme, claim experience, cover, and more.
For standard conditions, probable premiums will come to INR 5000 related to say an INR 3 Lakh base amount with INR 2 Lakh top-up cover. Sometimes, companies also tend to offer their critical illness policy as a part of the add-on related to their base cover. The main reason behind this is cost-containment no doubt, yet employees may use it for the fortification of protection portfolio too. It also brings several other benefits and one is dealing with increasing medical inflations.
With inflations rising by 12% to 18% annually, health covers or group covers of even INR 3 Lakh to INR 5 Lakh seems quite inadequate, spelling the need for top ups. Here are the coverage terms and even premium rates seem insured-friendly. Just like any other traditional group cover, pre-existing illnesses in the top-ups remains a part of group voluntary top up. Claims settlement is also quite smooth and easy. Irrespective of all the associated benefits, the ultimate decisions can be made only after reading the fine print thoroughly.